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Full House Resorts Inc. profits exceed expectations

8 November 2012

LAS VEGAS -- Full House Resorts, Inc. on Wednesday reported third-quarter earnings that beat analyst expectations across the board, as the company posted a double-digit increase in casino revenues and earnings from its casinos in Northern Nevada.

The Las Vegas-based company reported net income of $2.1 million, or 11 cents per share, compared with a loss of $1.1 million, or 6 cents per share, in the third quarter of last year.

Revenue for the third quarter was $30.1 million, up from $27.4 million last year.

Analysts polled by Yahoo Finance expected earnings of 2 cents per share on revenue of $29.5 million.

"Full House turned in impressive third quarter results," said Justin Sebastiano, an analyst with Brean Capital LLC. "These results highlight management's ability to operate casinos efficiently and to make value-added acquisitions of casino assets."

Sebastiano said he doesn't believe the market is giving Full House or its stock its due. He reiterated his firm's "buy" rating and $4.50 price target.

Shares of Full House lost 5 cents, or 1.56 percent, to close at $3.15 Wednesday on the New York Stock Exchange.

"We are very pleased with out performance in the quarter," Andre Hilliou, chairman and CEO of Full House, said in a conference call Wednesday with analysts. "We saw steady performance at our Rising Star casino despite new competition in Ohio."

Hilliou said that once again "Northern Nevada out performed expectations." Earnings for the group of casinos, including Stockman's Casino in Fallon and the Grand Lodge Casino in Lake Tahoe, was $2.6 million, and increase from $600,000 in the third quarter of 2011.

"We are very pleased with the performance of the Grand Lodge Casino," Hilliou said.

Full House took over management of the Grand Lodge Casino in September 2011.

At its Rising Star Casino in Rising Sun, Ind., revenue was $22.3 million compared with $24.1 million in the third quarter last year. The casino posted third-quarter earnings of $2.7 million, compared to $2.6 million last year.

Management fees from Buffalo Thunder casino in Santa Fe, N.M., were $300,000. So far in 2012, Full House has earned $2.1 million in the first year of its management contract.

The company on Oct. 1 completed its $70 million acquisition of the Silver Slipper Casino in Hancock County, Miss. Hilliou said the company expects to add hotel rooms as it leverages corporate resources to further improve the Silver Slipper's profitability.

"With the Silver Slipper acquisition completed, it continues our transformation from a management company to an owner/operator of strong local casinos," he said.

Hilliou said Full House would look for "additional assets to add" while focusing on its casinos and the properties it manages.